Financial Sector Assessment Program - Albania : Public Debt Management

Government debt continues to expand, reaching over all 872 billion, approximately 62 percent of gross domestic product (GDP), as of end-September 2013. Domestic debt grew sharply in the first half of 2013, emanating largely from poor tax revenue performance, together with the accumulation of a large stock of unpaid bills and arrears. External debt creditors comprise multilaterals, bilateral creditors, and private creditors. The concentrated nature of the investor base and the high domestic debt stock limit the choices available to debt management, particularly with regards to extending the maturity of the domestic debt. Public debt management in Albania follows an organized process but will benefit from a number of technical changes. The domestic borrowing plan has been revised frequently due to unexpected flows in the treasury account. In an environment of volatile treasury balances, cash flows safety nets or minimum cash buffers should be implemented. A number of initiatives are recommended to improve the transmission of price signals in the primary market - overall this will provide incentives for secondary market development. To support the development of the secondary market the General Directorate of public debt management should modify its issuance program and focus on key maturities on the yield curve. It is suggested that the issuance program takes a small step in this direction by limiting the number of tenors and focusing on for example, two, five, seven, and ten-year treasury bonds as well as increasing the frequency of 5 and 7-year maturities from quarterly to bi-monthly. This will provide more frequent price discovery in the primary market that will support portfolio valuation.

Bibliographic Details

Main Authors:	World Bank, International Monetary Fund
Language:	English en_US
Published:	World Bank, Washington, DC 2014-02
Subjects:	ACCOUNTING, ANNUAL BORROWING PLAN, ARREARS, AUCTION, AUCTION MECHANISM, AUCTIONS, BALANCE SHEET, BALANCE SHEETS, BANK DEPOSITS, BANKING SECTOR, BASIS POINTS, BENCHMARK BONDS, BID, BIDS, BOND AUCTION, BOND AUCTIONS, BOND INVESTORS, BOND STOCK, BOOK ENTRY, BOOK ENTRY SYSTEM, BORROWING COSTS, BORROWING REQUIREMENT, BORROWING STRATEGIES, BROKERAGE, BUY-BACKS, BUYBACKS, CAPITAL FLOWS, CAPITAL MARKETS, CASH BALANCE, CASH BALANCES, CASH FLOW, CASH FLOWS, CASH MANAGEMENT, CASH RESERVE, CENTRAL BANK, CENTRAL GOVERNMENT DEBT, CENTRAL SECURITIES DEPOSITORY, CLEARING HOUSE, COMMERCIAL BANK, COMMERCIAL BANKS, COMMERCIAL LOANS, COMPETITIVE BIDDING, COUPON BONDS, CREDIT GROWTH, CREDIT RISKS, CREDITORS, CUSTODY, DEBT INSTRUMENTS, DEBT ISSUANCE, DEBT LEVEL, DEBT OPERATIONS, DEBT SERVICE, DEBT SERVICE PAYMENTS, DEBT STOCK, DEPOSIT, DEPOSIT INSURANCE, DEPOSITORS, DEPOSITORY SYSTEM, DERIVATIVES, DOMESTIC BORROWING, DOMESTIC DEBT, DOMESTIC DEBT MARKET, DOMESTIC DEBT SECURITIES, DOMESTIC MARKET, EUROBOND, EXCHANGE RATE, EXIT MECHANISM, EXPENDITURE, EXPENDITURES, EXTERNAL BORROWING, EXTERNAL DEBT, FINANCIAL INSTITUTIONS, FINANCIAL MANAGEMENT, FINANCIAL MARKET, FINANCIAL MARKETS, FISCAL DEFICIT, FISCAL POLICIES, FIXED COUPON, FIXED INTEREST, FIXED RATE BONDS, FLOATING INTEREST RATE, FLOATING RATE, FOREIGN CURRENCY, FOREIGN DEBT, FOREIGN EXCHANGE, FOREIGN INVESTORS, GOVERNMENT BONDS, GOVERNMENT BORROWING, GOVERNMENT DEBT, GOVERNMENT DEBT SECURITIES, GOVERNMENT PAPER, GOVERNMENT SECURITIES, GOVERNMENT SECURITIES AUCTIONS, GOVERNMENT SECURITIES MARKET, GROSS DOMESTIC PRODUCT, HOLD TO MATURITY, HOLDING, HOLDINGS, HOLDINGS OF GOVERNMENT SECURITIES, ILLIQUID MARKET, INDIVIDUAL BONDS, INDIVIDUAL INVESTORS, INFLATION, INFORMATION SYSTEM, INSTITUTIONAL INVESTORS, INSTRUMENT, INTEREST RATE, INTEREST RATE PAYMENTS, INTEREST RATE RISK, INTEREST RATE RISKS, INTEREST RATES, INTERNATIONAL BANK, INTERNATIONAL CAPITAL, INTERNATIONAL CAPITAL MARKETS, INTERNATIONAL SECURITIES, INTERPOLATION, INVESTMENT BANK, INVESTMENT FUND, INVESTMENT HORIZONS, INVESTOR BASE, ISSUANCE, ISSUANCE OF TREASURY BILLS, LIABILITY, LIABILITY MANAGEMENT, LIQUID ASSETS, LIQUID MARKET, LIQUIDITY, LIQUIDITY POSITIONS, LIQUIDITY RISK, LOAN, LOAN GUARANTEES, LOCAL CURRENCY, LOCAL GOVERNMENT, LONG-TERM INSTRUMENTS, LONG-TERM INVESTORS, MARK-TO-MARKET, MARKET CONDITIONS, MARKET ENVIRONMENT, MARKET FOR GOVERNMENT SECURITIES, MARKET INFRASTRUCTURE, MARKET MAKING, MARKET PARTICIPANTS, MARKET RISKS, MARKET STRUCTURE, MARKET TRADES, MARKET TRANSACTIONS, MARKET YIELD, MARKETABLE DEBT, MATURITIES, MATURITY, MATURITY DATE, MONETARY AUTHORITY, MONETARY FUND, MONETARY POLICY, MONEY MARKET, OUTSTANDING DEBT, PAYMENT OBLIGATIONS, PAYMENT SYSTEM, PORTFOLIO, PORTFOLIO VALUATION, PORTFOLIOS, POST OFFICES, PRICE DISCOVERY, PRICE TRANSPARENCY, PRIMARY DEALER, PRIMARY DEALER SYSTEM, PRIMARY MARKET, PRIVATE CREDITORS, PUBLIC DEBT, PUBLIC DEBT MANAGEMENT, PUBLIC DEBT STOCK, REGISTRY SYSTEM, REGULATORY FRAMEWORK, REPAYMENT, REPO, REPO RATE, RETAIL INVESTOR, RETAIL INVESTORS, RISK CONTROL, RISK PROFILE, SAFETY NETS, SECONDARY MARKET, SECONDARY MARKET ACTIVITY, SECONDARY MARKET DEVELOPMENT, SECONDARY MARKET LIQUIDITY, SECONDARY MARKET PRICE, SECONDARY MARKET TRADING, SECONDARY MARKET TRANSACTIONS, SECONDARY MARKETS, SECURITIES MARKET DEVELOPMENT, SETTLEMENT, SETTLEMENT SYSTEM, SETTLEMENT SYSTEMS, SHORT-TERM BONDS, SHORT-TERM DEBT, SUB-NATIONAL BORROWINGS, SUPERVISORY AUTHORITY, T-BILL, T-BILLS, T-BOND, T-BONDS, TAX, TIME DEPOSITS, TOTAL DEBT, TRANSACTION, TREASURY, TREASURY BILL, TREASURY BILL AUCTION, TREASURY BILL AUCTIONS, TREASURY BILLS, TREASURY BOND, TREASURY BOND AUCTIONS, TREASURY BONDS, TREASURY NOTES, TURNOVER, UNIFORM PRICES, VALUATION, VALUATION FRAMEWORK, VARIABLE COUPON, VARIABLE RATES, YIELD CURVE,
Online Access:	http://documents.worldbank.org/curated/en/2014/02/19768097/albania-financial-sector-assessment-program https://hdl.handle.net/10986/19295
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